Upstart Stock Soars 14% After Strong Q3 2024 Earnings and Positive Guidance

Upstart Holdings Inc. (NASDAQ: UPST) saw its stock price surge by 14% in after-hours trading on Thursday, following the release of its strong Q3 2024 earnings report. The company, which operates an AI-driven lending platform, reported significant improvements in its financial performance and issued positive guidance for the fourth quarter of 2024.

In the third quarter, Upstart achieved a 20% year-over-year increase in revenue, reaching $162 million, and a notable 43% sequential growth in lending volume. The company also returned to positive adjusted EBITDA, a key indicator of its financial health, despite challenging economic conditions.

CEO Dave Girouard highlighted the company’s progress, stating that Upstart continues to strengthen its position as a fintech leader in artificial intelligence. The core personal loan product saw substantial growth, driven by the launch of sophisticated AI models, such as Model 18, which improved conversion rates significantly. Additionally, Upstart’s newer products, including auto and home lending, are gaining traction, and the company’s funding supply has become more durable with committed capital from innovative partnership structures.

Financial metrics for the quarter included a 14% year-over-year increase in total fee revenue and a 30% rise in the number of loans originated compared to the same period last year. Although the company reported a net loss of $6.8 million, this was a significant improvement from the $40.3 million loss in the previous year. The contribution profit rose by 9%, indicating robust performance in core operations.

Looking ahead, Upstart expects continued growth with projected revenue of approximately $180 million for the fourth quarter of 2024. The company anticipates maintaining its trajectory towards profitability while navigating macroeconomic challenges and further strengthening its AI-driven lending solutions.